Purchasing a vacation home can be very rewarding – both personally and financially! Many look at vacation homes for entertaining purposes, while others simply want a home-away-from-home for annual family trips, or even a home that can be passed from generation-to-generation.

Whatever your reason may be, there are several things to carefully consider before taking the plunge!

Rent First– You’ve done research, perhaps even stayed in a vacation community that you are considering for your purchase. It is definitely a good idea to rent a home in the community before you buy! If you plan to visit year-round, you will want to rent in each season to get a true feel for the home and the area. A home during the summer can be very different than a home in the winter! Also consider whether there are activities close by that your family enjoys, shops for browsing, sites to see, and restaurants to visit!

Consider the Rental Potential – Even if you decide not to rent the home while you own it, it is still a very good idea to consider the rental potential of the property. Homes that can be rented are more valuable. Should your personal situation change……….you will at least have the option to rent if necessary. There are also some significant tax advantages to renting your vacation home that you may want to consider.

5 Year Plan – Real estate is not a liquid investment. To get the most out of your investment, it is recommended that you keep your personal residence for at least 5 years. This should be doubled for vacation properties! Market downturns can be much harder on vacation homes than on primary residences. It is best to have a long-term horizon so you can ride out the ups and downs of the market.

Location– Your best bet is to purchase a home near a major metropolitan region. More than 80% of vacation-home buyers also make their purchase within driving distance of their permanent residence. Being close allows a homeowner to use their second-home more frequently! Buying a property in an isolated, far-off area will significantly reduce your resale potential.

Budget– When creating your budget, be sure to include the mortgage costs, as well as an estimate for taxes, insurance, utilities, and maintenance. You should set aside approximately 2% of the home’s value for maintenance. (Landscaping, a caretaker, repairs, painting, etc.) Be realistic! Set aside extra funds for “surprises” and don’t forget to include the cost of traveling to your vacation home!

10 Most Popular Towns in which to buy a Vacation Home (courtesy Trulia)

Have you made your New Year’s Resolution? Most folks want to improve themselves and find ways to make their day-to-day personal or work life better. Real estate resolutions are right up there with weight-loss, a dream vacation, to stop smoking, etc. But there is much more to a real estate resolution than deciding to buy or sell a home. If a real estate resolution is on your list, be sure you have considered these “micro-resolutions” as well.

BUYERS:

Find a Real Estate Agent Now – Engaging a Realtor early in the process will allow you to get to know each other and determine your goals. REALTORS® will advise you and make valuable recommendations, such as reputable lenders, problem areas during a showing, questions to ask the home inspector, etc.

Save Down Payment Money – Today, there are numerous loan options available to homebuyers, with different down payment criteria. Consider meeting with a lender to discuss these options in advance and determine how much you should start putting aside.

Pay-Off / Clean-up your Debt – This is a top goal for most folks today, even if not considering a real estate purchase. Again, you should consider meeting with a professional for guidance on this task. They can help you identify your credit issues and come up with a plan to correct them before you are ready to buy. Keep in mind, it could take as much as six months to clean up your credit.

Boost your Credit Score – Along those same lines as above, you should pull your own credit report (annualcreditreport.com) to see where you stand versus where you should be. Review for any discrepancies or errors and take care of them as soon as possible.

Start Early – Going to open houses is an easy way to see what is on the real estate market. But, you should begin doing your homework even before this step. Familiarize yourself with the current housing market, understand home values, and determine the home prices by neighborhood. Going to open houses is a good second step and a great way to meet your future real estate agent.

SELLERS:

Find a Real Estate Agent Now – A Realtor doesn’t just show and sell homes, they can be a valuable adviser on issues that arise before settlement. Your agent can help you get your home ready to sell, decide on the best asking price, market your home effectively, and negotiate on your behalf; their knowledge will save you time and money. Ask family, friends, or neighbors, for a good recommendation.

Think of your Home as a Product – Buyers will compare your home and your list price to other competing properties. A home that is priced correctly and shows well, will sell the fastest. Your Realtor can help you determine the best listing price for your home, while you work on getting it in the best shape to show! A home that shows well is clean, clutter-free and as up-to-date as possible. Your Realtor can also help you determine which home “projects” will be the most practical and bring you the best return on your investment.

Plan your Strategy and Timing – Uprooting from a home is not easy. One of the big stresses can be planning to sell your home at the same time you try to buy another. There are lots of things to consider in this situation; must you sell before you buy? Will you be able to sell at a price that will give you enough return? It’s a lot to think about and plan for; it helps to have a strategy in place well before you take action. A knowledgeable real estate agent in Maryland or Pennsylvania can help you establish your plan.

Prudential Homesale Services Group was ranked as the eighth most successful Prudential broker in North America, based on the Company’s 2010 gross revenues.

In addition, Prudential Homesale’s Manheim Township office was designated as the third most successful Prudential office in the northeast region of the United States. Prudential Homesale’s Manheim Township office is located at 150 North Pointe Boulevard, Lancaster.

The Prudential Real Estate Network has over 1,600 franchise offices and more than 54,100 sales professionals nationwide.

Locally, Prudential Homesale has seven locations in Lancaster County and 23 locations overall.

About Prudential Homesale: Prudential Homesale offers consumers a menu of services including realty, mortgage, settlement, insurance, warranty, relocation, builder/developer services, career services, and a complete customer care center. Information about the company can be found at http://www.PrudentialHomesale.com. Prudential Homesale is the # 1 homeseller in south central and southeastern Pennsylvania. The only regional real estate company with headquarters in the area, Prudential Homesale’s 23 offices service 11 contiguous south central and southeastern Pennsylvania counties.

“We help people achieve their dreams” is the core purpose of its associates as they strive each day to help others achieve the American dream of homeownership. Contact Doug Rebert at 717-333-6123 or visit http://www.PrudentialHomesale.com for more information.